VOLT GROUP LIMITED — Interim / Quarterly Report 2015

Aug 25, 2015

Enerji
Ltd

ABN
62
009
423
189

ERJ (ASX: )

**Interim

Report**

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APPENDIX 4D (RULE 4.2A.3) INTERIM FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2015

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Current reporting period: Previous corresponding reporting period:	30 June 2015 30 June 2014

	Revenues from ordinary activities Profit / (loss) from ordinary activities after tax attributable to members	item 2.1 2.2	Change % 0% 234%	to to	Current period ($A000) - 699	from from	Previous correspond ing period ($A000) 0 -520
	Net profit / (loss) for the period attributable to members	2.3	234%	to	699	from	-520

Dividends

There are no dividend or distribution reinvestment plans in operation and there have been no dividend or distribution payments during the financial half year ended 30 June 2015.

Net tangible assets per ordinary security

Net tangible assets per ordinary security
		Previous
		corresponding
	Current period	period
Net tangible assets	$(3,080,693)	$5,896,003
Number of shares on issue at reporting date	550,673,677	550,673,677
Net tangible assets per ordinary security	$(0.006)	$0.011

Audit / review status

This report is based on the 2015 half-year consolidated financial statements of Enerji Ltd and its controlled entities, which have been reviewed by BDO Audit (WA) Pty Ltd. The Independent Auditor’s Report provided by BDO Audit (WA) Pty Ltd is included in the attached half-year consolidated financial statements for the half-year ended 30 June 2015 and contains an emphasis of matter. The Emphasis of Matter draws attention to the uncertainty of the Company to continue as a going concern. In order to continue to make instalments on further Powerboxes and complete projects as and when secured, the Company will be required to secure debt funding in the form of project or equipment finance or raising equity. The Company also continues to obtain funding via the Research and Development Rebate each year. The Board is confident in its ability to raise additional funds as and when required and therefore have reasonable grounds to believe that the Company will be able to meet its obligations as and when they fall due.

This information should be read in conjunction with the 2014 Annual Financial Report of Enerji Ltd and its controlled entities and any public announcements made in the period by Enerji Ltd in accordance with the continuous disclosure requirements of the Corporations Act 2001 and Listing Rules.

Additional Appendix 4D disclosure requirements can be found in the Directors Report and the attached half-year consolidated financial statements for the half-year ended 30 June 2015.

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Interim Report

INTERIM FINANCIAL STATEMENTS

ENERJI LTD AND CONTROLLED ENTITIES

30 June 2015

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CONTENTS

	Corporate Directory Directors Report Auditor’s Independence Declaration Consolidated Statement of profit and loss and other comprehensive income Consolidated Statement of financial position Consolidated Statement of changes in equity Consolidated Statement of cash flows Notes to the financial statements Declaration by Directors Independent Auditor’s review report to the to the members of Enerji Ltd	3 4 5 6 7 8 9 10 18 19

CORPORATE DIRECTORY

Directors

Mr Rod Phillips - Non-executive Chairman Mr Peter Avery – Non-executive Director Mr John Dekker - Non-executive Director

Management

Mr Andrew Vlahov – Chief Executive Officer Mr Colin Stonehouse – Chief Development Officer Mr Peter Torre – Company Secretary Mr Stephen Jones – Chief Financial Officer

Principal Registered Office in Australia

Unit B9, 431 Roberts Rd Subiaco WA 6008 (08) 6143 4100 www.enerji.com.au

Share register

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2014 and any public announcements made by Enerji Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.

Link Market Services Pty Ltd Level 4 Central Park 152 St Georges Terrace Perth WA 6000

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008

Solicitors

Steinepreis Paganin Level 4, 16 Milligan Street Perth WA 6000

Bankers

Bankwest Perth CSC 108 St Georges Terrace Perth WA 6000

Stock exchange listing

Enerji Ltd shares are listed on the ASX in Australia (ASX: ERJ)

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DIRECTORS REPORT

project complexity, time and cost of delivery.

Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Enerji Ltd (“Enerji” or “the Company”), and the entities it controlled at the end of, or during, the half-year ended 30 June 2015.

Directors

The name of persons who were directors of the company during the half-year and up to the date of this report are:

Mr Rod Phillips (appointed 21 May 2015) - Non-executive Chairman

Mr Peter Avery – Non-executive Director

Mr John Dekker (appointed 21 May 2015) - Non-executive Director

Mr Justin Audcent (resigned 9 February 2015) - Nonexecutive Director

Mr Steve Formica (resigned 21 May 2015) - Non-executive Director

Mr Peter Thomas (resigned 21 May 2015) – Non-executive Director

Company Secretary

Mr Peter Torre (Torre Corporate)

In May 2015 the Company announced it had entered into Mandate and letter of commitment from Northern Star Resources Limited to evaluate the application of ATEN technologies at its Jundee gold mine (“Jundee”)

The Company continues to work with Northern Star on the potential for maiden off-take agreement for lower-cost, zero emission electricity with a financial investment decision expected in third quarter 2015.

Also in May the Company appointed two new Directors and a new Chief Executive Officer continuing the work to prepare the Company to move from product development into project commercialisation.

The Company continues to operate as a research and development focussed company and received $2.4M during the period as a rebate from 2014 activities and expenditures.

Operating results

The consolidated entity recorded an operating profit after income tax for the half-year of $699,049 (2014: $520,370 loss). The profit including the following items of significance:

• § Consulting and professional costs ($1,368,242)

• § Consulting income ($382,000)

• § R&D Refund ($2,429,373)

Corporate actions

Principal activities

The principal activities of the Group during the course of the financial year were:

• § Design and development of systems to produce electricity from heat.

The net deficiency of the consolidated entity at 30 June 2015 was $3,080,693 (December 2014: $3,779,742).

As at 30 June 2015 the Group had cash and cash equivalents of $1,175,783.

The net cash outflow from operating activities of $1,175,177, and net cash outflows from financing activities of $590,000.

• § Discussions with possible customers of waste heat to electricity generation systems.

Review of operations

During the half-year reporting period to 30 June 2015, Enerji continued its corporate re-engineering and product development activities and continued the advance toward the commercialisation of its products.

The Company’s products harnesses waste heat from power generation and industrial processes to generate electricity.

Through its unique Accretive Thermal Energy Node (ATEN) technology, it converts heat into electricity without using any additional fuel or creating any additional emissions.

ATEN captures heat accretively from a range of different sources and simultaneously conditions it for use in a single heat-to-power system. ATEN’s competitive advantage is that it feeds directly into the customers electricity supply to reduce their cost base. Product development continued to advance not only the technical aspects of the ATEN system but also the development of compact standardised design suitable for prefabricated modular manufacture reducing

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 5.

This report is made in accordance with a resolution of directors.

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Rod Phillips Director

Perth 26 August 2015

Interim Report

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF ENERJI LTD

As lead auditor for the review of Enerji Ltd for the half-year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Enerji Ltd and the entities it controlled during the period.

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Jarrad Prue

Director

BDO Audit (WA) Pty Ltd

Perth, 26 August 2015

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

Interim Report

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the half-year ended 30 June 2015

Note Revenue from continuing operations Other income 4(a) Employment benefits expense Impairment of assets 4(b) Directors fees Share based payments Consulting and professional costs Depreciation and amortisation 4(c) Other expenses 4(d) Finance income Finance costs Profit / (Loss) before income tax expense from continuing operations Income tax benefit Profit / (Loss) after income tax benefit from continuing operations Profit / (Loss) after income tax benefit for the period Other comprehensive loss for the period, net of tax Total comprehensive profit / (loss) for the period Profit / (Loss) for the period is attributable to: Owners of Enerji Ltd Total comprehensive profit / (loss) for the period is attributable to: Owners of Enerji Ltd Earnings per share for profit / (loss) attributable to the ordinary equity holders of the company: Basic profit / (loss) per share Diluted profit / (loss) per share	Half-Year 2015 2014 (restated) - - 2,835,211 852,915 - (110,567) - 3,855 (89,314) (55,915) - (30,296) (1,368,242) (415,982) (2,799) (529,245) (659,820) (100,569) 26,115 3,903 (42,102) (138,469)
	699,049 (520,370) - -
	699,049 (520,370)
	699,049 (520,370)
	- -
	699,049 (520,370)
	699,049 (520,370)
	699,049 (520,370)
	$0.001 ($0.001) n/a n/a

The above Consolidated Statement of Profit or Loss and Comprehensive Income should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2015

Note ASSETS Current assets Cash and cash equivalents 5 Prepayments and other receivables 6 Loans 6 Total current assets Non-current assets Property, plant and equipment 7 Total non-current assets Total assets LIABILITIES Current Liabilities Trade and other payables 8 Loans and borrowings 9 Total current liabilities Total liabilities Net deficiency EQUITY Contributed equity 11 Reserves 11 Accumulated losses Total deficiency in equity

30 June 31 December 2015 2014 1,175,783 590,606 100,641 117,714 331,790 321,916 1,608,214 1,030,236 28,468 31,267 28,468 31,267 1,636,682 1,061,503 4,717,375 4,219,620 - 621,625 4,717,375 4,841,245 4,717,375 4,841,245 (3,080,693) (3,779,742) 61,063,087 61,063,087 5,853,602 5,853,602 (69,997,382) (70,696,431) (3,080,693) (3,779,742)

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the half-year ended 30 June 2015

Notes At 1 January 2014 Total comprehensive loss for the half-year Loss for the half-year Total comprehensive loss for the period Transactions with owners in their capacity as owners Contribution of equity, net of transaction costs 11 Equity-based payment transaction – expenses 11 Conversion of convertible notes 11 Equity-based payment transaction – options Employee shares scheme At 30 June 2014 At 1 January 2015 Total comprehensive profit for the half-year Profit for the half-year Total comprehensive profit for the period Transactions with owners in their capacity as owners Contribution of equity, net of transaction costs 11 Equity-based payment transaction – expenses 11 Equity-based payment transaction – options 11 Employee shares scheme At 30 June 2015	Share capital Reserves Accumulated losses Total equity 59,733,407 5,872,539 (60,021,767) 5,584,179
	- - (520,370) (520,370)
	- - (520,370) (520,370)
	1,105,088 - - 1,105,088 124,592 - - 124,592 100,000 - - 100,000 - 30,296 - 30,296 (18,937) - (18,937)
	1,329,680 11,359 - 1,341,039
	61,063,087 5,883,898 (60,542,137) 6,404,848
	61,063,087 5,853,602 (70,696,431) (3,779,742)
	- - 699,049 699,049
	- - 699,049 699,049
	- - - - - - - - - - - - - - - -
	- - - -
	61,063,087 5,853,602 (69,997,382) (3,080,693)

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CASH FLOWS

For the half-year ended 30 June 2015

Cash flows from operating activities Payments to suppliers and employees (inclusive of goods and services tax) R&D tax refund Interest paid Interest received Net cash inflows / (outflows) from operating activities Cash flows from investing activities Payments for property, plant and equipment Net cash outflows from investing activities Cash flows from financing activities Proceeds from issue of shares and other equity securities Proceeds from borrowings Repayment of short-term facility Repayment of convertible notes Payment of transaction costs Net cash inflows / (outflows) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the half-year Cash and cash equivalents at end of the half-year	Half-Year 2015 2014 (1,220,548) (1,030,736) 2,429,373 - (49,889) (62,015) 16,241 3,903
	1,175,177 (1,088,848)
	- (58,112)
	- (58,112)
	- 1,166,197 250,000 94,500 (750,000) - (90,000) - - (61,109)
	(590,000) 1,199,588
	585,177 52,628 590,606 105,201
	1,175,783 157,829

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the half-year ended 30 June 2015 1 Reporting entity

Enerji Ltd (the “Company”) is a company domiciled in Australia. The address of the Company’s registered office is Suite C22, Level 1, 513 Hay Street, Subiaco WA 6008. These interim financial statements of the Company as at and for the half-year ended 30 June 2015 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group primarily is involved in the marketing of energy recovery and clean energy generation solutions.

2 Basis of preparation

(a) Statement of compliance

These interim financial statements for the half-year reporting period have been prepared in accordance with Australian Accounting Standard 134 “Interim Financial Reporting” and the Corporations Act 2001. These half-year financial statements do not include all the notes of the type normally included in annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial statements. Accordingly, these half-year financial statements are to be read in conjunction with the annual financial statements for the year ended 31 December 2014 and any public announcements made by Enerji Ltd during the half-year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.

(b) Basis of measurement

These interim financial statements have been prepared on the historical cost basis.

(c) Functional and presentation currency

These interim financial statements are presented in Australian dollars, which is the functional currency of the Company and each of its subsidiaries.

(d) Changes in accounting policies

Other than as noted below the same accounting policies and methods of computation have been followed in these half-year financial statements as compared with the most recent annual financial statements.

The Group previously accounted for refundable R&D tax incentives as an income tax benefit. The Group has determined that these incentives are more akin to government grants because they are not conditional upon earning taxable income. The Group has therefore made a voluntary change in accounting policy during the reporting period. Refundable tax incentives are now accounted for as a government grant under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance because the directors consider this policy to provide more relevant information to meet the economic decision-making needs of users, and to make the financial statements more reliable. The comparative period has also been adjusted.

(e) Going concern

These interim financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Group incurred a comprehensive profit after tax for the period ended 30 June 2015 of $699,048 (2014: Loss of $520,370) and experienced net cash inflows from operating activities of $1,175,178 (2014: outflow of $1,088,848). The variance to last period was the receipt of the 2014 R&D Tax Incentive refund of $2,429,373 in June 2015.

In order to continue to make instalments on further Powerboxes and complete projects, the Group will be required to secure debt funding in the form of project or equipment finance or raise equity. The Group’s Management has held preliminary discussions with a large Australian bank specifically to be satisfied of the reasonableness of this approach. The Company provided technical data and independent valuation material to the bank and the informal feedback from the bank is that the technology and the valuations are acceptable and that a funding application would be routinely considered once a project is advanced to the appropriate stage, i.e. revenue is contracted. The Company continues to work with Northern Star on the potential for maiden offtake agreement for lower-cost, zero emission electricity with a financial investment decision expected in third quarter 2015.

These conditions, indicate the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern.

Should the Group be unable to continue as a going concern it may be required to realise its assets and discharge its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Group be unable to continue as a going concern and meet its debts as and when they fall due. The directors are satisfied that the going concern basis remains appropriate.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 Segment reporting

The Group determines and presents operating segments based on the information that internally is provided to the CEO, who is the Group’s chief operating decision maker.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.

The Group is organised into one operating segment. These operating segments are based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and in determining the allocation of resources.

4 Profit and loss

4 Profit and loss
(a) Other Income Research and development tax incentive rebate Consulting fees Other (b) Impairment Impairment – plant and equipment Total depreciation (c) Depreciation and Amortisation Distribution rights Plant and Equipment Borrowing costs Total amortisation (d) Other Expenses Provision for doubtful debts Other Total other expenses 5 Current assets – Cash and cash equivalents Cash at bank and in hand	Half-Year 30 June 30 June 2015 2014 2,429,373 852,915 382,000 - 23,838 -
	2,835,211 852,915
	- (3,855)
	- (3,855)
	- 500,554 2,799 5,063 - 23,628
	2,799 529,245
	409,000 - 250,820 100,569
	659,820 100,569
	30 June 31 December 2015 2014 1,175,783 590,606
	1,175,783 590,606

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6 Current assets - Prepayments and other receivables

Current assets - Prepayments and other receivables
Current Other receivables Restricted cash – bank guarantee Loan to related party	30 June 31 December 2015 2014 641 17,714 100,000 100,000
	100,641 117,714
	331,790 321,916
	331,790 439,630

Loan to Related Party

Refer to Note 13 for further details.

7 Non-current assets - Property, plant and equipment

At 31 December 2014 Cost or fair value Accumulated depreciation Impairment of assets Net book amount at 31 December 2014 Half-year ended 30 June 2015 Opening net book amount Depreciation charge Net book amount at 30 June 2015 At 30 June 2015 Cost or fair value Accumulated depreciation Net book amount at 30 June 2015 8 Current liabilities - Trade and other payables Trade payables - Opcon AB Trade payables - other	Construction in progress	Office furniture, fittings and equipment Total
	6,476,571 - (6,476,571)	96,734 6,573,305 (65,467) (65,467) - (6,476,571)
	-	31,267 31,267
	- -	31,267 31,267 (2,799) (2,799)
	-	28,468 28,468
	- -	96,734 96,734 (68,266) (68,266)
	-	28,468 28,468
		30 June 31 December 2015 2014 2,295,676 2,295,676 2,421,699 1,923,944
		4,717,375 4,219,620

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9 Current liabilities – Loans and borrowings

Current liabilities – Loans and borrowings
Short term facility Unsecured convertible notes Loan liability Embedded derivative	30 June 31 December 2015 2014 - 500,000 - 90,375 - 31,250
	- 621,625

Short-term facility

On 18 December 2014 Enerji Ltd executed a Facility Agreement, which provided for a loan facility of up to $500,000, at an interest rate of 14%pa, secured against R&D Tax Refunds. On 30 March 2015 the loan facility was increased by $250,000 at an interest rate of 15%pa. This facility was repaid upon receipt of the R&D tax refund for the 2014 financial year on 1 June 2015.

Convertible note liability

Convertible notes had been issued at a coupon rate of 4% pa. They have a 12 month maturity from issue date, however are convertible during this period at the discretion of the holder.

On 7 February 2014 the parent entity issued 9 notes totalling $90,000 to Primero under a Facility Agreement as approved by shareholders on 13 November 2013. These funds were used to settle outstanding invoices for works carried out at the Carnarvon Power Station.

An embedded derivative exists as the notes are convertible into ordinary shares of the parent entity at the lesser of $0.005 and 80% of the VWAP over the 5 ASX trading days prior to the relevant issue, with 1 free attaching Class A Option for every 2 shares issued, on the option of the holder, or repayable as follows:

6 February 2015 - $90,000

In June 2015 the company settled the convertible notes issue to Primero for a cash payment of $90,000 plus interest refer to the Consolidated Statement of Cash Flows.

The liability and embedded derivative component of the note recognised at 31 December 2014 at $90,375 and $31,250 has been reversed and recognised as part of finance costs in the consolidated statement of profit or loss and other comprehensive income.

There are no amounts outstanding on this at 30 June 2015.

10 Fair value measurement of financial instruments

This note provides an update on the judgements and estimates made by the group in determining the fair values of the financial instruments.

The net fair value and carrying amounts of financial assets and financial liabilities are disclosed in the Statement of Financial Position and in the notes to the Statement of Financial Position.

For unlisted investments where there is no organised financial market the net fair value has been based on a reasonable estimation of the underlying net assets or discounted cash flows of the investment, where this could not be done, they have been carried at cost. No financial assets or financial liabilities are readily traded on organised markets in standardised form other than investments.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(a) Financial Instruments Measured at Fair Value

The financial instruments recognised at fair value in the Statement of Financial Position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:

• quoted prices in active markets for identical assets or liabilities (Level 1);

• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and

• inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)

31 December 2014 Financial liabilities Embedded derivative Totals 30 June 2015 Financial liabilities Embedded derivative Totals	Level 1 Level 2 Level 3 Total $ $ $ $
	- 31,250 - 31,250
	- 31,250 - 31,250
	Level 1 Level 2 Level 3 Total $ $ $ $
	- - - -
	- - - -

(b) Valuation techniques used to determine fair value

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted (unadjusted) market prices at the end of the reporting period. The quoted marked price used for financial assets held by the group is the current bid price. These instruments are included in Level 1.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.

Specific valuation techniques used to value financial instruments include:

• The use of quoted market prices or dealer quotes for similar instruments.

• The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.

• The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

• The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11 Equity (a) Contributed equity 30 June 31 December 2015 2014 Shares Shares Share Capital Ordinary shares – Fully paid 550,673,677 550,673,677 Options Options Options $2.00 Expiry December 2016 6,473,904 6,473,904 $0.30 Expiry June 2015 - 133,147,686 Total contributed equity Half-year 2015 No. of Shares $ Movements in ordinary shares during the half-year Balance at the beginning of the period 550,673,677 61,063,087 Adjustment on consolidation - - Shares issued for cash - - Shares issued on conversion of notes - - Shares issued for services rendered - - Share issue and capital raising costs - - Total contributed equity 550,673,677 61,063,087 (b) Reserves Share based reserves – Reserve holding shares subject to the achievement of performance based measures Options based reserves	30 June 31 December 2015 2014 Shares Shares 550,673,677 550,673,677		30 June 31 December 2015 2014 $ $ 61,063,087 61,063,087 - - - - 61,063,087 61,063,087 Full Year 2014 No. of Shares $ 272,515,576 59,733,407
	Options Options 6,473,904 6,473,904 - 133,147,686 Half-year 2015 No. of Shares $ 550,673,677 61,063,087
	- - - - - - - - - -		214 - 233,239,571 1,166,197 20,000,000 100,000 24,918,316 124,592 - (61,109)
	550,673,677 61,063,087		550,673,677 61,063,087
			30 June 31 December 2015 2014 $ $ 3,470,000 3,470,000 2,383,602 2,383,602 5,853,602 5,853,602

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following movements in options occurred during the period:

he following movements in options occurred	during the period:
$0.30 Options expiry 30 June 2015 Balance at the beginning of the period Expired during the period Total Options $2.00 Options expiry 31 December 2016 Balance at the beginning of the period Total Options	Half-year Full year 2015 2014 No. of Options $ No. of Options $ 133,147,686 838,364 133,147,686 838,364 (133,147,686) - - -
	- 838,364 133,147,686 838,364
	No. of Options $ No. of Options $ 6,473,904 1,545,238 6,473,904 1,545,238
	6,473,904 1,545,238 6,473,904 1,545,238

12 Contingent liabilities and commitments

(a) Contingencies

On 3 February 2015 the Company announced it had reached a Memorandum of Agreement (MOA) with Carbon Reduction Ventures Pty Ltd (CRV) and Morawa Solar Thermal Pty Ltd (MST) for the planned development of a Hybrid Solar Thermal Project. The Company advised CRV and MST in June 2015 that the development criteria listed in the MOA for the continued pursuit of the Hybrid Solar Thermal Project have not been met and the Company will not progress the project any further.

On 7 August 2015 the Company received a claim from MST for payment of amounts that the MOA identified would be payable if the parties were able to reach a final investment decision by 30 June 2015. The claim received from MST was for $300,000 plus GST. The Company is preparing to actively defend the claim believing it to be without merit.

Depending on the success or otherwise of the claim from MST the Company may be required to make adjustments to its Consolidated Statement of Profit or Loss and Consolidated Statement of Financial Position including possible changes in the Other Income relating to claims made under the research and development tax incentive rebate. The quantum of any changes will only be known at the time that the claim from MST is settled.

There have been no other changes since the last annual financial report.

(b) Commitments

Lease commitments – the Company has entered into new leasing arrangements for its current premises at Suite 22, 513 Hay Street, Subiaco. The sublease agreement provides for a 3 month term commencing on 1 July 2015 with subsequent 3 month options until February 2016. The monthly rental is $2,500/month plus GST and variable outgoings. The sublease also includes the rental of 2 car bays at $325/month plus GST on the same terms.

Bank Guarantees – on 29 June 2015 the Company entered into a Variation Deed to the Deed of Release dated 25 August 2014 with the Regional Power Corporation (trading as Horizon Power) (“Horizon”). The Variation Deed recognised that Horizon held a $100,000 bank guarantee against the past performance of the Company and included an agreement to increase the bank guarantee by $10,000 per month until 1 December 2015 to a maximum of $220,000. The variation gave Horizon recourse to the bank guarantee if the Company failed to pay Horizon an amount of $215,516 related to the damages that were incurred whilst the Company was utilising Horizon plant as part of its previous technology trials. This amount has been recorded as a liability in the Company’s Trade Payables (Note 8). On 5 August 2015 the bank guarantee was increased to $190,000.

There have been no other changes since the last annual financial report.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

13 Related party transactions

On 25 March 2015 the Company appointed RV Sports to provide introductions of the Company to third parties who may become customers of the Companies developing range of products and services (RV Introduction Engagement). The terms of the RV Introduction Engagement included a monthly retainer, termination on or before 24 June 2015 and certain future payments for success as defined in the agreement. The Director of RV Sports assigned to this engagement was Mr Andrew Vlahov.

On 21 May 2015 Mr Andrew Vlahov accepted an offer from the Company to be appointed as Chief Executive Officer of the Company (CEO Engagement). The CEO Engagement is subject to formalisation in a complete services agreement, which is yet to be executed. To 30 June 2015 an amount of $26,039 has been paid for the CEO Engagement.

Mr Colin Stonehouse is engaged as the Chief Development Officer (CDO) by the Company through his engineering company Ames Associates Pty Ltd. During the period, Enerji paid Ames & Associates $367,500 with respect to Mr Stonehouse’s services.

From 3 June 2013 to 1 September 2014 these services were provided under the 2013 Services Agreement with Mr Stonehouse functioning as an executive director. The 2013 Services Agreement also described the provision of loan funds during 2013. At the 13 November 2013 General Meeting of the Company the shareholders approved the payment of outstanding fees and loan funds with equity, and provided for an additional issue of shares to Mr Stonehouse (or nominee) in the same amount as the payment of outstanding fees and loan funds, to be funded with a twelve month loan (Share Purchase Loan) to purchase the equivalent securities.

From 1 September 2014 the 2013 Services Agreement came to an end and was replaced with the 2014 Ames Agreement under which Mr Stonehouse provides personal management services as CDO and also professional engineering service assignments from time to time as directed by the Company. The 2014 Ames Agreement has a fee payment structure which includes payments for fees with a discount, un-deferred fees and deferred fees. The professional engineering services invoices for the half-year period had an un-deferred component of $642,017 and a deferred component of $582,063.

On 15 April 2015 the Company agreed to extend the term of the loan to 14 November 2016 unless agreed otherwise between the parties. In addition it was agreed that the loan will be partially repaid by offsetting a portion of the payment of any deferred payments made as set out pursuant to the 2014 Ames Agreement. Interest is payable at 6.45%pa.

Mr Peter Avery signed a consulting services agreement with Enerji Ltd, effective May 2014, to provide investor relations’ services through a related entity Dawesville Nominees Pty Ltd. During the period, Enerji paid Dawesville Nominees $60,000 with respect to Mr Avery’s services. It’s the directors’ opinion the fee and conditions within the contract are commercial.

14 Events occurring after the reporting period

On 5 August 2015 the Company presented an updated bank guarantee to Horizon for $190,000. This bank guarantee was prepared to meet the requirements of the variation to the Deed of Release discussed in Note 12 above.

On 7 August 2015 the company received a claim from Morowa Solar Thermal Pty Ltd (MST) for immediate payment of $330,000 relating to four invoices received by the Company from MST. Refer to Note 12 (a).

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DECLARATION BY DIRECTORS

The directors of the Company declare that:

• 1 The financial statements and notes set out on pages 6 to 17 are in accordance with the Corporations Act 2001 and:

• (a) comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

• (b) give a true and fair view of the Company’s financial position as at 30 June 2015 and of its performance for the halfyear ended on that date.

2 In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

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Rod Phillips Director

Perth

26 August 2015

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Enerji Ltd

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Enerji Ltd, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Enerji Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Enerji Ltd, would be in the same terms if given to the directors as at the time of this auditor’s review report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Enerji Ltd is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Emphasis of matter

Without modifying our opinion, we draw attention to Note 2(e) in the half-year financial report, which indicates that the ability of the consolidated entity to continue as a going concern is dependent upon securing debt funding in the form of project or equipment finance or raising equity in order to continue to make instalments on further Powerboxes and complete projects. These conditions, along with other matters as set out in Note 2(e), indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

BDO Audit (WA) Pty Ltd

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Jarrad Prue

Director

Perth, 26 August 2015

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